Digg, the social news curation site, is to sack over a third of its staff, in an effort to cut costs and reach profitability by 2011.

The news comes only five months, after the company announced it was axing 10pc of its staff.

A total of 25 staff members will lose their jobs, which is just over 37pc of the company's workforce.

The announcement from the company’s new chief executive, Matt Williams, came hot on the heels of the departure of Chas Edwards, Digg’s chief revenue officer.

Williams said: “Unfortunately, to reach our goals, we have to take some difficult steps. The fact is our business has a burn rate that is too high. We must significantly cut our expenses to achieve profitability in 2011.

We’ve considered all of the possible options for reduction, from salaries to fixed costs. The result is that, in addition to lowering many of our operational costs, I’ve made the decision to downsize our staff from 67 to 42 people.

“It’s been an incredibly tough decision. I wish it weren’t necessary. However, I know it’s the right choice for Digg’s future success as a business. I’m personally committed to help find new opportunities for everyone affected by the transition. Digg’s Board members have also offered to help find placements within their portfolio companies.”

At the end of August, Digg rolled out a major redesign in a bid to increase the site’s appeal and make the service more personalised.

At the time Kevin Rose, Digg’s co-founder, described the new look as a “major revision” of the platform. Writing on the company’s blog about Digg, version 4, he said: “This is just phase one of what will be an on-going, iterative process, involving lots of input from all of you. We'll be pushing out features on a regular basis and tweaking often.

“Our goal has always been for Digg to be a place where people can discover and share content and conversations from anywhere on the web. With Digg v4, we are introducing a few things that will make discovering and discussing news a lot better.”

Rose talked in detail to The Telegraph at the beginning of this year about his plans for the major redesign, which he said could shock users, but was necessary so that the site would be better positioned to embrace the real-time web.

“We're making some drastic changes, but they're much-needed drastic changes," he told The Telegraph. "People are going to be shocked at some of the directions we're taking. You have to be comfortable with completely tearing down and throwing away a bunch of ideas."

Digg, which was launched in 2004, is a social news service designed to help web users discover and share content from around the internet.

Digg members submit links to stories, and the user community votes on how interesting those stories are by "digging" the articles they like, and "burying" those they don't.

The site attracts more than 35 million unique users per month, and many news websites and blogs feature Digg buttons to allow readers to easily share articles they've enjoyed.

However, its popularity has waned in the last 12 months, with many people preferring to share links to stories through sites like Twitter.